Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West
Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Porter v Agricorp
Porter v Agricorp 1999 ONAFRAAT 14
STATUTE:
Crop Insurance Act
HEARING:
June 10, 1999
June 22, 1999
1999-14
NEUTRAL CITATION:
1999 ONAFRAAT 14
Porter v Agricorp
IN THE MATTER OF:
Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) 1996, S.O. 1996, C. 17, Sched. C.
AND IN THE MATTER OF:
An Appeal to the Crop Insurance Appeal Board by Murray Porter, Pontypool, Ontario, from the decision of AGRICORP denying him a claim under Ontario Regulation 380/97 and the Crop Insurance Plan For Soybeans.
Before:
James Rickard, Chair; Armand Bechard, Member; Doug Flook, Member.
Appearances:
Murray and Heather Porter, appellants.
Barry Roberts, Judith Kay-Schecter and Dennis Yellowlees, on behalf of the respondent, AGRICORP.
DECISION OF THE BOARD
This appeal was heard in Guelph, Ontario on Thursday, June 10, 1999.
Murray Porter, Pontypool, Ontario, appealed the decision of AGRICORP denying him a claim under Ontario Regulation 380/97 and the Crop Insurance Plan For Soybeans.
Background
In proposing and administering the Soybean Plan, AGRICORP derives its authority from Section 5 of the Crop Insurance Act (Ontario), 1996 and Regulation 380/97 Crop Insurance Act (Ontario) 1996, General, and the Crop Plans 1998.
The role of the Board is set out in Ontario Regulation 140/96. Specifically, clauses 2 and 3 of the regulations state:
2 The Board has exclusive jurisdiction to hear and determine all disputes between the Commission and an insured person arising out of the adjustment of a loss under a contract of insurance.
3(1) If the Commission and an insured person have failed to resolve any dispute arising out of the adjustment of a loss under a contract of insurance and have complied with all requirements respecting the filing of proof of loss forms, either party may appeal the matter in dispute to the Board.
3(2) To appeal the matter in dispute, the appellant shall file a notice of appeal with the Board and send a copy of the notice to the other party within one year of filing the proof of loss form.
3(3) Where a party has appealed in accordance with subsection (2), the Board shall fix a day, a time and a place for considering the matter in dispute and hearing the parties, and shall notify the parties accordingly.
3(4) On the day, and at the time and place so fixed, the Board shall hear the evidence of the parties respecting the matter in dispute, and shall make a decision on the matter.
The Board does not have the authority to amend the contract of insurance.
The insurance plan for soybeans has both floating and fixed price options. The floating price is determined by the elevator track price which is the selling price of a rail car load of soybeans. The fixed insurance price option for soybeans is $8.00 per bushel.
If an insured peril causes actual production to be less than the guarantee, a claim is paid on the difference. Insured perils are: drought, excessive moisture, flood, insect infestation, wind, hail, excessive rainfall, frost, plant disease and wildlife. If one or more of the perils causes the harvested yield to be less than the guaranteed production, a claim will be paid on the shortfall in yield.
AGRICORP insures crops against perils from planting until harvest. If an uninsured peril reduces the crop yield, the amount of loss is deducted from the guarantee. Claims will not be paid on this portion of the loss. An insured must notify AGRICORP prior to harvest if their crop is damaged by an insured and/or uninsured peril. Failure to do so may jeopardize their crop insurance claim and market revenue payment.
Since crop insurance is based on the concept of individual average farm yield, it is the customer’s responsibility to provide AGRICORP with an accurate yield. A representative of AGRICORP visits the customer after harvest to measure and collect yields.
Responsibilities of Customer:
- establish coverage by May lst.
- Cancel coverage by April lst.
- Report correct planted acreage by June 30th.
- Pay crop insurance premium by July 10th.
- Report damage when it occurs.
- Provide an accurate yield.
- Insure all acres of the insured crop.
- Use recommended farm management practices.
In 1998, Mr. Porter purchased 90% coverage on 150 acres of soybeans with an average farm yield of 26.52 bu./acre. He purchased the fixed price option of $8/bu. His actual yield was 20.15 bu./acre. Thus Mr. Porter had a shortfall in yield of 3.72 bu./acre or 557.38 bushels [26.52 bu. (guaranteed yield) x 90% = 23.87 bu. – 20.15 bu. (actual yield)= 3.72 bu. x 150 acres = 557.38 bushels].
The Issue
The issues for the Board to decide are:
Did an insured peril cause the loss, and
Did Mr. Porter report damage prior to harvest?
The Evidence
Mr. Porter told the Board that he has been farming for about 31 years. He owns 200 acres and rents other land from neighbors. He has a cow-calf herd and grows hay, spring grain, corn and soybeans.
He said the Corona bean is a low heat unit variety recommended for his area. He grew Corona beans successfully in 1996 and 1997. He said they stand nice and are easy to combine. In 1998, there was a dry spring so he was able to start planting his beans early. He started planting the Corona beans May 20 and finished May 30. He said this is the earliest he has ever planted beans. Normally he plants his beans in June.
He said his soybean crop looked good and he did not realize until he started combining that some fields had a good stand but very few pods. On September 29, Ron Brooks, yield evaluator for AGRICORP, came to his farm to obtain his spring grain yields. He said he had just finished combining his first field of soybeans and mentioned to Ron Brooks that his soybeans did not yield well in the first field. He said he thought Mr. Brooks would have reported this to AGRICORP. He said some of his soybean fields yielded well and others did not. It wasn’t until he finished combining that he realized he was in a claim position. He did not call AGRICORP at this point as he thought he had already reported to Ron Brooks. He said the soybeans he planted last had the highest yields. In his opinion, these beans received the rain required when the beans were in blossom. He said other farmers in the area planted a longer growing variety of bean and they had good yields. He attributes his downfall on yield to dry weather for three weeks in July when the beans he planted early were flowering.
Mr. Porter said he spoke with John Van Herk, plant breeder for W. G. Thompson, to try to understand why his beans did not yield well. Mr. Van Kerk told him that a bean, like Corona, that has a short growing season has to do everything in a shorter length of time and if it gets severe weather when flowering it won’t pod out. He said the beans he planted May 20 would have had three weeks of drought about the time they were flowering.
He referred the Board to the results of the W.G.Thompson & Sons 1998 soybean test plot. The Corona beans, which they planted May 30, yielded 33.3 bu./acre He submitted this was close to the same yield he received (30 bu./acre) from the fields he planted May 30. He said there were only two other people in the immediate area who grew some Corona beans. The one farmer said he would not grow Corona beans again. Mr. Porter said with the dry spring again this year, he made the decision not to plant Corona beans even though he had the seed.
Mr. Porter also reviewed with the Tribunal rainfall records from a neighbour indicating little or no rainfall for a three-week period in July. He said his area may have received a regular amount of rainfall during the growing season but during the critical growing period for some of his beans there was a drought. The Board also reviewed the heat unit chart which indicated that in 1998 his area received 500 more heats units than in 1997.
Mr. Porter said AGRICORP have blown what they call a weed problem out of proportion. He said the Adjuster’s Report says 50 acres were affected by weeds. He said he agreed at the time that there may have been seven acres. However, he said this spring he only had to spray three acres for twitch grass. He submitted into evidence a letter from Joe Hickson, Midnight Acres, stating that when he planted 111 acres of soybeans for Murray Porter this spring his fields had no twitch grass problem, just a few milkweed. Mr. Porter also submitted a letter from Barry McMullen, Agrico which stated: “Murray Porter in June of 1998 purchased Pursuit and Basagran Forte for his soybean ground. The fields looked good after spraying when Murray and I checked”. Therefore, he submitted, it was not a weed problem that reduced his yield.
In response to questions of the Tribunal, Mr. Porter said his crop rotation is beans, corn and hay. Some of the fields have been in beans for five years.
Mr. Roberts, Claims Manager for AGRICORP, told the Board he denied Mr. Porter’s claim because he did not comply with reporting requirements which meant AGRICORP could not verify the cause of loss. He said Mr. Porter admitted to an infestation of weeds. Weeds are not an insured peril. There were no other soybean claims in Manvers Township. In fact, above average yields were recorded. Therefore the only possible conclusion for AGRICORP is that poor farm management practices and weed infestation were the cause of the loss.
He said Mr. Porter has been enrolled in crop insurance in prior years and has had previous claims so he ought to have known of the importance of notifying AGRICORP of damage prior to harvest. He told the Board that since a claim had not been reported prior to harvest, the first time AGRICORP had a chance to review the causes of the low yield was January 15, 1999.
Mr. Roberts reviewed the rainfall records for Victoria County which indicated a county average of 455mm. This average, he submitted, is similar to the rainfall records submitted by a neighbour of Mr. Porter whose average rainfall was 499 mm for April to October. Other farmers in the county experienced above average crops. Thus he does not believe drought is the cause of the poor yields received by Mr. Porter.
Mr. Roberts told the Tribunal he does not understand how Mr. Porter had above average yields in corn and spring grain and yet was in a claim position with his soybean yield. He also stated that some of the land is marginal for planting soybeans. However, in response to questions from the Board, he did agree that AGRICORP insured this land.
Mr. Roberts referred the Board to the 1998 Crop Plans brochure (the brochure) and specifically to the section on Losses Due to Uninsured Perils which reads as follows: “If an uninsured peril reduces your crop yield, the amount of loss is deducted from the guarantee. Claims will not be paid on this portion of the loss. You must notify AGRICORP prior to harvest if your crop is damaged by an uninsured peril.” He also referred the Board to the section of the brochure which states the obligations of the insured are to: “Report Damage When It Occurs – Notify AGRICORP as soon as damage occurs to your crop. Failure to do so may jeopardize your crop insurance claim and market revenue payment.”
Judith Kay-Schecter, Claims Director with AGRICORP, told the Board that AGRICORP has a Customer Action Center that has a toll free number where crop damage can be reported as soon as it occurs. It can also be used to find the status of a claim. She does not understand why Mr. Porter did not use this number to report his claim or to follow up on the status.
Judith Kay-Schecter, questioned Mr. Porter as to what was said to the yield evaluator on September 29. In response, Mr. Porter said he told him his first field of beans did not yield well. He said he honestly thought Mr. Brooks had filed a report. He said he asked him about this again when he came to the farm December 2 to collect his yields. He said he thought Mr. Brooks would have been at the hearing to testify.
Mr. Yellowlees, adjuster for AGRICORP, said he first became aware of Mr. Porter’s claim in January 1999. His yields were not consistent with others in the township. He said there were no other soybean claims in Manvers Township, in fact the township average yield was 37 bu./acre. He said it is difficult for AGRICORP to come in after harvest to verify damage especially when there are no comparable problems in the area.
He told the Tribunal that, on January 15, 1999, he and Barry Roberts interviewed Murray Porter to try to determine the cause of loss. He said they talked about crop management practices. When they talked about weed control the answers were varied. In his Adjuster’s Report, he tried to break down each field to determine where the twitch grass problem was. From the information he received, his best guesstimate was that the overall loss due to weeds was 500+ bu. However, Mr. Porter stated that, in his opinion, loss due to weeds was closer to 100 bu. Mr. Yellowlees said he was basically interviewing Mr. Porter to try to establish the cause of loss. Mr. Porter had stated there was a drought problem, but also admitted there were some weed pressures.
Mr. Yellowlees told the Board that good management practices would suggest that you plant more than one variety of soybeans to spread the risk. He also suggested that a five or six year continuous bean program is somewhat risky.
The Findings
The Board heard arguments from AGRICORP that Mr. Porter had an above average spring grain and corn crops in 1998 and thus should have experienced a high yielding soybean crop. The Board believes that the yields of spring grain and corn crops have very little bearing on the yield of soybean crop.
Mr. Porter argued that the date of planting, the early variety and weather experienced in 1998 contributed to the low yield. The rainfall and heat unit records presented to the Board indicate that there was very little or no rain for about three weeks in July as well as an increase of 500 heat units more than an average year. The cumulative effect of these climatic conditions would magnify the drought effect. The records from the W. G. Thompson demonstration plot also showed a low yield from the Corona bean as compared to the other types of beans that were planted. AGRICORP staff disagreed saying there were no other soybean claims in the area in fact yields were above average. In their opinion, cause of loss was other than drought. The Board accepts Mr. Porter’s argument that the date of planting of the Corona beans and the amount of heat and drought at blossom time could have affected the yield of his beans.
In his letter of appeal, Mr. Porter said he expressed a concern to Ron Brooks that his soybean crop did not appear to have done well. AGRICORP staff said they did not remember seeing Mr. Porter’s letter of appeal and thus did not follow up with Ron Brooks to ascertain whether or not he remembered the conversation with Mr. Porter. The Board was disappointed that AGRICORP staff did not follow up with Ron Brooks. In the absence of conclusive evidence, the Board accepts Mr. Porter’s testimony that he did report a potential loss to Ron Brooks prior to harvest and that somehow that information did not get transferred to AGRICORP claims staff.
Mr. Porter thought he had reported that he may be in a claim situation when Ron Brooks visited his farm to obtain his crop yields. He said he did not follow up immediately as the first field he combined had low yields and then the second field yielded well. It was not until he finished combining that he realized he was in a claim position. The Board believes that the difference between the guaranteed yield and the actual yield was close enough that Mr. Porter may not have realized that he was in a claim position until harvest was completed. However, at that point, Mr. Porter felt he had already advised AGRICORP that he may have been in a claim position and thus did not place a second call.
The Board heard testimony from Mr. Porter that this was his third year of planting Corona beans and that for the past two years he had success growing these beans. Mr. Porter agreed that his crop rotation could be better. He said in 1998 the Corona bean also did not produce well in the W.G. Thompson test plot. AGRICORP staff argued that it was poor management practice to plant all 150 acres in one type of bean. In their opinion he should have planted different types of beans and spread the risk. The Board accepts Mr. Porter’s evidence that since he had past experience growing these beans it was reasonable to plant all of his acreage with these beans. The Corona bean is a recommended variety for the area where Mr. Porter farms.
The appellant testified that he spot sprayed his fields with round up prior to planting in the early spring. He then sprayed Pursuit and Basagran in June at rates recommended by Agrico from whom he purchased the spray. Barry McMullen of Agrico stated in his June 7th letter that “the fields looked good after spraying when Murray and I checked”. AGRICORP staff argued that since Mr. Porter did not report a claim they were unable to observe the crop prior to harvest. AGRICORP presented the Adjuster’s Report, dated January 15, 1999, which reports 50 acres of crop loss due to twitch. Mr. Porter signed this report and wrote on it that only 7 acres was really bad. There was no independent third party observation prior to harvest. The Board accepts Mr. Porter’s evidence that there was not a lot of crop loss due to weeds.
In his March 29, 1999 letter, Mr. Porter asked the Board to grant him a claim of 457 bushels. His original claim was for 557 but he said he would be satisfied if his claim was reduced by 100 bushels due to some loss resulting from twitch grass and milkweed.
Decision and Reasons
After careful consideration of the evidence and submissions before it, the Tribunal decided to grant Mr. Porter’s appeal for the following reasons:
In the opinion of the Board, it was an insured peril of drought that contributed to the reduced soybean yield.
The Board accepts the evidence of Mr. Porter that he did report a potential claim to an AGRICORP employee prior to harvest.
Order of the Tribunal
The Board orders AGRICORP to pay Mr. Porter a reduced production claim of 457 bushels as requested in his letter dated March 29, 1999.
The Board calculates this as follows:
Guaranteed Production 26.5 bu./acre x 90% = 23.87
Actual Production 20.15 bu./acre
Shortfall 3.72 bu./acre x 150 acres = 557 bushels
Less 100 bushels = 457 bushel
(which client attributes to twitch grass and milkweed)
DATED AT Guelph, Ontario this 22nd day of June, 1999.